Saturday, June 4, 2016

The Trial of Trip-Based Fares

A goal of publicly owned bike-share systems is to provide
safe, cheap, and widespread transit for its citizens and visitors. While annual
memberships offer this for frequent customers, the 24-hour membership that many
systems have does this poorly for infrequent and would-be customers. To improve
upon this, the Washington, D.C. region’s Capital Bikeshare has embarked upon a
new pilot fare – the $2 “Single Trip”.

Unlike the common duration-based bike-share fare types, lasting
anywhere between 24 hours and 1 year, the trip-based fare type is more
transit-oriented as it’s focused on the lowest common denominator – the trip itself
– rather than a time period. The Single Trip fare’s $2 cost gives a customer up to 30 minutes of ride time with greater
usage fees for longer trips. Capital Bikeshare’s Single Trip fare is one of the
least expensive fare options of the “buffet model” of pricing in North
America that was discussed here on The Bike-sharing Blog on September 14, 2014.
The D.C. region joins Pittsburgh’s Healthy Ride with their similarly priced “Pay As You Go” fare.

Offering a trip-based fare in an established duration-based
fare structure creates great risk. The risk is that revenues would drastically
drop as customers who were formerly paying for a higher priced 24-hour
membership, instead decide to purchase a trip-based pass at a quarter of the
price. Less revenue would hurt a system’s cost recovery and make the
system more reliant on other revenue sources, such as public subsidy or more
advertising, if these options were available. To many public and non-profit
systems, they are not.

The other possible outcome is that the trip-based fare
would induce more trips by those for whom a 24-hour membership cost were too
high, but who would pay the cheaper $2 fare which is comparable to the price of
other modes of transit.

It’s unknown at this point which way the wheels will turn
on trip-based versus duration-based revenues, however things are looking good. Over
the past year new and established systems in North America have been inching
towards lower-cost trip-based fares, such as with Montreal’s “One Way” pass for $2.95 CAD ($2.28 USD) and Philadelphia’s “Walk-up”
and Minneapolis/St. Paul’s “Single Rides”
passes – both for $4. There is also the “Pay As You Go“ fares of Social Bicycles that are charged by the minute -- another good solution.

Whatever name the pass goes by, the trip-based fare will
hopefully increase bike-share trips, generate greater revenue, lower the financial
barrier for people who need just one or two trips rather than 24 hours of trips,
and make riding a bike a legitimate 2-wheeled transit option in a country where
bike-riding for transport is not commonplace. Further, it could make bike-share
resemble the more common fare structure of other modes of transit by removing
the membership aspect and pricing it similarly to bus, streetcar, and rail.

At an historic time in the Washington, D.C. region where
the country’s 2nd most highly used subway system has begun a nearly
year-long maintenance surge of single-tracking and station closures for weeks at a time
starting today, Capital Bikeshare’s Single Trip fare will hopefully
provide an economical and convenient transport option for the thousands of
commuters who are looking for another mode in which they can rely upon for the
next year and beyond. If Capital Bikeshare and other innovative bike-share
systems are successful with the trip-based fare, it could be a new model for bike-share systems to emulate.